If India were a big musical, RBI and Finance Ministry would sing these songs

The tussle between the Finance Ministry and the central bank over the monetary policy is a serious one, but did you ever wonder what would have happened had it turned musical?

The Reserve Bank of India on Wednesday maintained status quo on repo rate at 6% given the concern over rising inflation and fiscal slippages (Image: PTI)

The Reserve Bank of India on Wednesday maintained status quo on repo rate at 6% given the concern over rising inflation and fiscal slippages. It disappointed India Inc and the government, who had been demanding a rate cut to get the investment cycle rolling, while economists hailed the decision saying it was necessary. The tussle between the Finance Ministry and the central bank over the monetary policy is a serious one, but did you ever wonder what would have happened had it turned musical? RBI’s Deputy governor Viral Acharya, sure, has an idea.

At the launch of book ‘From Lehman to Demonetization: A Decade of Disruptions, Reforms and False Promises’ Viral Acharya, instead of speaking seriously on the constant tussle between the Finance Ministry and the RBI, chose the quirkier route of explaining the relationship. Here’s how the Finance Ministry and the RBI would communicate on the monetary policy — musically.

Viral Acharya is known for putting his thoughts out candidly. A professor from the New York University, Viral Acharya, was appointed as a deputy governor last year. RBI’s decision to leave its policy rate and neutral stance unchanged while mildly raising its inflation forecast for the second half of this fiscal has put the task of spurring the economic recovery, of which there is scant evidence so far, more in the hands of a fiscally stressed government.